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Bubbly Waters currently sells 430 Class A spas, 580 Class C spas, and 330 deluxe model spas each year. The firm is considering adding a mid-class spa and expects that if it does, it can sell 505 units per year. However, if the new spa is added, Class A sales are expected to decline to 290 units while the Class C sales are expected to increase to 605. The sales of the deluxe model will not be affected. Class A spas sell for an average of $14,500 each. Class C spas are priced at $7,300 and the deluxe models sell for $18,300 each. The new mid-range spa will sell for $9,300. What annual sales figure should you use in your analysis?

Bubbly Waters currently sells 430 Class A spas, 580 Class C spas, and 330 deluxe model spas each year. The firm is considering adding a mid-class spa and expects that if it does, it can sell 505 units per year. However, if the new spa is added, Class A sales are expected to decline to 290 units while the Class C sales are expected to increase to 605. The sales of the deluxe model will not be affected. Class A spas sell for an average of $14,500 each. Class C spas are priced at $7,300 and the deluxe models sell for $18,300 each. The new mid-range spa will sell for $9,300. What annual sales figure should you use in your analysis?

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Bubbly Waters currently sells 430 Class A spas, 580 Class C spas, and 330 deluxe model spas each year. The firm is considering adding a mid-class spa and expects that if it does, it can sell 505 units per year. However, if the new spa is added, Class A sales are expected to decline to 290 units while the Class C sales are expected to increase to 605. The sales of the deluxe model will not be affected. Class A spas sell for an average of $14,500 each. Class C spas are priced at $7,300 and the deluxe models sell for $18,300 each. The new mid-range spa will sell for $9,300. What annual sales figure should you use in your analysis?
Transcribed Image Text:Bubbly Waters currently sells 430 Class A spas, 580 Class C spas, and 330 deluxe model spas each year. The firm is considering adding a mid-class spa and expects that if it does, it can sell 505 units per year. However, if the new spa is added, Class A sales are expected to decline to 290 units while the Class C sales are expected to increase to 605. The sales of the deluxe model will not be affected. Class A spas sell for an average of $14,500 each. Class C spas are priced at $7,300 and the deluxe models sell for $18,300 each. The new mid-range spa will sell for $9,300. What annual sales figure should you use in your analysis?
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